Third Energy Package for Change of Supplier 2009/73/EC. The requirement. European directive to ensure that customers can switch their gas supply within 3 weeks. In the majority of cases, current industry processes allow transfer for all customers within 3 weeks. Work to date.

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Numerous processes use the SPA non-business-days. Analysis to date has demonstrated that 85 processes would be affected by removal of this data. The consequences of these impacts are a mix of both “desired impacts ”, i.e. required for, or consistent with, implementation of the EU directive, and “undesired impacts”, i.e. not required to implement the EU directive. Many non-SPA impacted processes have not been analysed yet.

The statements on the previous slide are supported by the following quotes from recently issued DECC documents

DECC – Government Response

1.4 “Suppliers will need to make adjustments to their systems to ensure that as many customers as possible are able to switch within three weeks (after the end of any cooling-off period for domestic consumers). In doing so, we would expect thesuppliers to work proactively with other suppliers and market participants and their customers…”

1.5 “Ofgem will be leading work with the suppliers in the next few months to put together a programme of proportionate changes with a view to increasing the number of customerswho are switched within three weeks. “

1.10 “A licence requirement on all suppliers to take reasonable steps to improve their systems and processes so as to increase the speed at which customers switch. An obligation on the incumbent supplier and Gas Transporter to co-operate with the new supplier to enable the transfer.”

1.12 “Ofgem will lead a programme of work to provide the industry with guidance on the steps needed to improve their systems and processes so thatmore customers are able to switch within the new timescales”

DECC - Impact Assessment

Description: “Suppliers to be required to make improvements to their systems and processes to ensure that as many people as possible are able to switch within these timescales”

Introduction: “The requirements of the Directives must be transposed into domestic legislation by 3 March 2011”

5.22

“The obligation to switch customers within 3 weeks will start the day after the contract is entered into, unless a cooling-off period applies, in which case it starts after the cooling-off period expires (provided this does not exceed 14 calendar days).

To enable a new supplier to comply with the obligation to switch the customer within 3 weeks, operators of exempt distribution networks will be expected to take all reasonable steps to ensure that the new supplier is able to start supplying the customer within the relevant period.”